Focus Media Gets $3.5B Buyout Offer from PE Group

Features Reuters

Chinese display-advertising provider Focus Media Holding Ltd (FMCN.O) said it received a bid to go private from a consortium that includes its Chief Executive Jason Nanchun Jiang and private equity firms Carlyle Group and CITIC Capital Partners.

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The $27 per American depositary share offer values the company at $3.49 billion based on its shares outstanding, according to Thomson Reuters data.

The offer is at a premium of 15.5% over Focus Media stock's Friday close. 

Shares of the company, which has a market value of $3.02 billion as of Friday close, were trading up 11.8% at $26.18 on Monday on the Nasdaq. They touched a high of $26.45 earlier.

Focus Media operates flat-panel display screens in commercial buildings in more than 100 cities and also has screens in elevators in 35 cities and screens in supermarkets and convenience stores, according to regulatory fillings.

The consortium also includes FountainVest Partners, CDH Investments and China Everbright Ltd, Focus Media said. 

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The company's board has formed a committee of independent directors to consider the offer.  The CEO held about 18% of the company's outstanding shares as of Dec. 31, according to its annual report.  

The transaction will be financed with a combination of debt and equity capital. The proposal letter dated Aug. 12 said the consortium has been in discussions with Citigroup Global Markets Asia Ltd, Credit Suisse AG and DBS Bank Ltd about financing the debt portion.

The banks have indicated to certain of the consortium members that they are highly confident of their ability to fully underwrite the debt financing, the company said. Carson Block-led shortseller Muddy Waters in November had alleged that Focus Media overstated its assets and overpaid for acquisitions, but the company repeatedly denied the allegations.